Why Thursday’s Sell-Off Matters

The stock market was rocked on Thursday, posting its worst single day decline in nearly four months. Such declines are certainly not unexpected, and it was clear following a spring and summer of quiet markets that some degree of downside volatility was more than overdue. But unlike many other recent stock market pullbacks, Thursday’s decline was notable, as it came with a convergence of troubling forces not seen in capital markets in over a year. In short, the stock market sell-off on Thursday matters, and how events unfold in the coming days should be watched closely for potential action, if needed.

Please click on the link to read more of my article on Seeking Alpha.

The Four Horsemen Of The Stock Market Apocalypse

Storm clouds continue to accumulate on the stock market horizon. Following an impressive five-year rally that saw stocks not only rebound from its financial crisis lows but also explode to new highs, signs are continuing to emerge that a change may soon be coming. So while the skies remain generally sunny over the U.S. stock market today with the major averages continuing to set new highs amid notably persistent investor bullishness, it may not be long before markets find themselves confronted with the final judgment when the markets are ultimately forced to begin truly working through all of the excesses that were accumulated first leading up to the financial crisis and then even more so in its aftermath. It may be a few months, a couple of years or perhaps even longer before we finally arrive at this inflection point. Then again, it may have just now gotten underway. Only time will tell. But regardless of the timing, as long as the global economy continues to languish, debt continues to accumulate, and geopolitical tensions continue to mount, such a judgment day is coming. Fortunately, for those investors concerned about such an outcome, investment markets provide not only a way to protect against potential losses but also to achieve impressive rewards for those that are best prepared.

Please click on the link to read more of my article on Seeking Alpha.

The Crisis That Isn’t (Yet)

The stock market has been an utter horror for investors these past few days. In what has been a most unpleasant interruption to the persistently dreamy trading bliss over the last several months, stocks have actually (gasp) gone down over the last several trading days (oh, the humanity!). But while the recent decline of less than -4% has certainly generated its share of desperate media pleas in search of when the worst will finally be over, this so called crisis isn’t even a crisis (at least not yet), as the signs of broader stress to the underlying financial system are mostly lacking at this stage. Instead, the recent decline may simply be a sign that investors are finally looking for opportunities somewhere other than stocks for a change.

Please click on the link to read more of my article on Seeking Alpha.

Perspectives On Friday’s Sell Off

Stocks took it on the chin to close out the trading week. After having already fallen by nearly -1% on Thursday, the stock market accelerated to the downside with another -2.09% decline on Friday. This sudden sharp decline likely has many investors looking for answers as to whether this is simply a benign pullback or the start of something much bigger. Finding the answer to this question lies in the details, and monitoring some key qualitative and quantitative themes can provide useful perspective and guidance if volatility continues into the coming week.

Please click on the link to read more of my article on Seeking Alpha.

2014 Outlook: Enter Volatility

It was the best of times for the U.S. stocks in 2013.  It was also the worst of times, however, for just about everything else in investment markets last year.  Given this stark contrast in performance between stocks and all other asset classes, it is reasonable to consider whether or not we are likely to see this trend continue into 2014.  While anything is possible in today’s policy distorted markets, the odds are stacked against such a resounding repeat performance for stocks in the coming year.  Instead, the playing field is likely to be leveled in 2014 with opportunities spread more evenly across asset classes.  And volatility, a stranger to the stock market throughout nearly all of 2013, also has the potential to return in earnest next year. [Read more...]

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